Abstract
COVID-19 decimated the global real economy, to what extent did the epidemic jeopardize the survival of small and medium enterprises (SMEs)? This study examines 13,026,723 SMEs in China to assess their resilience under the application of fintech in the banking sector. Our findings suggest that the epidemic reduced the probability of SME survival and increased the negative impacts of excessive distance between banks and enterprises and a banking structure dominated by large banks on SME survival. Fortunately, fintech strengthens SMEs’ resistance to risk shocks. Specifically, when banks and enterprises are farther apart and the banking structure is dominated by large banks, the positive impact of fintech on the resilience of SMEs to risk shocks becomes more evident. This suggests that fintech reduces the impact of geographical distance on the interaction between banks and enterprises and inverts the traditional notion that large banks are unsuited to serving SMEs.
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